By James Nicholson-Smith, Business Development Director & Managing Principal, West Midlands Region, The FD Centre
Entrepreneurship is sometimes described as an 'affliction'. The reason for this is that generating new ideas is a skill that is often hard wired into entrepreneurs to such an extent that it produces an overload of new initiatives in their businesses and sometimes the creation of completely new businesses.
The modern FDs role is often used as a sounding board for these new ideas or a filter. For those ideas that get beyond the initial test of reasonableness, they need to be analysed in terms of the management time they will require and monetary investment that will need. There is also a practicality side to consider especially when other projects are also in progress which may be inter-dependent with this idea.
Finally entrepreneurs rarely consider the risk of failure, because that is often considered "not an option". The FD carries out these tests in his capacity as sounding board for the entrepreneur. In SMEs it is normally quite an informal process. Nevertheless the time spent on the wrong ideas or tidying up the ones that have not worked is a major drain on fast growth businesses.
In contrast to yester-years FDs when decision-making was slowed down to a crawl, modern FDs should not be stifling innovation in this very fast moving economic world. On the contrary the skill is to identify those ideas that are most likely to be implemented smoothly and produce the return that they promise. Half finished ideas - however good they are will never deliver their promised return.
Read: The Modern FD Within Fast Growth Companies
In the meantime, the FD Centre can help your business achieve your strategic objectives for 2011 and beyond. Register for a free Business Strategic Review to discover how and receive valuable advice for your business's financial planning today. Or for more information, visit www.thefdcentre.co.uk.
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